Hike in HGV Road User Levy to put a strain on the haulage industry from early 2019
As part of the government’s wider strategy to improve air quality in the UK, a higher HGV Road User Levy will be rolled out next year which will affect hauliers with older trucks on the road. Such hauliers are now facing a 20% increase in the HGV Road User Levy they pay from February 2019 after the government revealed its plans.
Once the new levy comes into force, UK-registered Euro 5 trucks and older will be hit with the 20% rise, whilst the levy for Euro 6 vehicles will reduce by 10%. This could either be seen as a major penalty to bear for already hard pressed haulage firms, or it could be considered an incentive to upgrade their vehicles and act as a reward for those who do so.
What is the HGV Road User Levy?
The Road User Levy applies to HGVs of 12 tonnes or more. The levy total depends on several factors, all of which can be found on the Gov.uk website. Factors include the weight of the vehicle, its axle configuration and levy duration.
The idea behind the levy is to combat road damage and limit pollution. It’s thought that because newer Euro 6 lorries give off up to 80% less NOx (nitrogen oxide) than older wagons, the government is trying to incentivise hauliers to kit out their fleet with new vehicles. However, the 20% hike for companies which continue to use older trucks could have a profound impact on operations both at home and abroad. For a typical 40-44-tonne artic, it will add an extra £200 to the current £1,000 annual levy fee, while for Euro 6 trucks the fee will fall to £900.
The DVLA will collect levy payments, which must be made concurrently with the payment of the Vehicle Excise Duty (VED). Haulage firms from abroad must make their payment before they enter the UK.
How the news has been received
This has depended on which side of the fence a company sits on, however the move has been condemned by the Road Haulage Association (RHA) and Freight Transport Association (FTA) as being extremely unfair. It is deemed to be yet another tax hike on hauliers who are already feeling the pinch and doesn’t recognise the large amount of progress already made in making haulage practices more environmentally friendly. The RHA and FTA have then gone on to accuse the Government of being disinterested in the progress made and in fact are simply making life harder for haulage firms in its bloody-mindedness in creating an emissions-free future.
Cleaner air is beneficial to everyone and no one is arguing with that. But the RHA is saying that the Government is using its clean air policies to simply justify squeezing even more money out of already cash-strapped haulage firms. It’s felt that there’s a lack of incentive when what’s really needed is a realistic scrappage scheme that supports the industry during the transition and gives companies time to make the changes. It’s also thought that the increase for Euro 5 and earlier vehicles will hit small and medium-sized businesses the hardest, especially at a time when they’re already trying to find the money to upgrade their fleet anyway to comply with the planned Clean Air Zones. It means that the resale value of older trucks has now been drastically reduced, and the Euro 4 and 5 vehicles will fall out of favour so much that making the jump to afford new Euro 6s will become so much harder.